Expert Predicts New Exchange Rate, Rice Price as CBN Takes Action to Crash Dollar

• The managing director of Financial Derivatives Company Limited, Bismarck Rewane, has predicted favourable exchange rates of the naira
• Rewane said the Nigerian currency, the naira, will rally from N1,700 per dollar to N1,500 by September 2024
• Rewane also said that commodity prices will moderate following the initiatives of the Nigerian government

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment, and the economy for over a decade.

Bismark Rewane, the managing director of Financial Derivatives Company Limited, has said that the Nigerian currency, the naira, will rally from N1,700 to N1,500 per dollar as the Central Bank of Nigeria (CBN) 's interest rate hike is expected to boost foreign portfolio investment in August 2024.

CBN’s Monetary Policy Committee (MPC) raised the Monetary Policy Rate (MPR) to 26.75% from 26.25% in May 2024 to control surging inflation and promote a favourable environment for foreign investment.

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Naira to appreciate to N1,500 per dollar

Data from the FMDQ Exchange shows that the naira closed at N1,586.71 per dollar on Wednesday, July 24, 2024, compared to the N1,584.76 it traded the day before.

The dollar supplied by the willing buyers and willing sellers dropped by 39.12% to $171.03 million on Wednesday, July 24, 2024, from the $280 million recorded the previous day.

In the parallel segment of the foreign exchange market, the naira lost about N5 as the US dollar traded at N1,585 on Wednesday, July 24, 2024, as against the N1,580 it traded the previous day.

Rewaned disclosed on Channels Television that higher interest rates will increase savings and help tame inflation as the naira will rally to N1,500.

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Inflation will reduce

According to the economist, Nigeria’s inflation is expected to decline from 34.19% to about 32% and possibly to 20% by year-end.

Rewane listed the crucial indices that could make that happen, including reduced logistics costs, with contributions from the Dangote’s initiatives.

BusinessDay reports that Rewane said diesel prices have dropped drastically from N1,700 to N1,180, influencing public transportation and the movement of goods due to the price crash by Dangote Refinery.

He disclosed that implementing the new minimum wage will also play a part in easing inflation.

Prices of food commodities crash

The Financial Derivatives boss also predicted that commodity prices, such as rice, which are currently at N82,000, would drop to N70,000 by September.

He also forecasted that wheat flour could fall from N59,000 to N50,000 and beans from N150,000 to N110,000.

Last quarter's data from the NBS show mixed results: rice prices slightly increased by 2.4% from N80,000 to N82,000, while beans prices soared by 36% from N95,000 to N150,000.

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Palm oil prices increased by 9%, from N5,500 to N60,000, and eggs, depending on size, increased from N3,500 to N5,500.

Rewane said he expects these prices to drop with the influx of imported food following the 150-day duty-free import window provided by the Nigerian government.

Naira trades at new rates against pound, euro

Legit.ng earlier reported that the Nigerian currency, the naira, experienced a mixed performance in the foreign exchange market, with varying rates at the parallel and official markets.

According to Bureau de Change (BDC) operators in the parallel market, traders bought the euro and pound and sold at N1,570 and N1,580 to the dollar, respectively.

The naira also traded N2,020 and N2,070 to the pound and N1,650 and N1,700 to the euro.

Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng

Source: Legit.ng